Tasmania’s economic star continues to rise on the back of a booming tourism industry, improved business confidence and rapid population growth.
- Tasmania tops four of eight CommSec indicators
- Businesses and consumers are feeling more comfortable, says CommSec’s Craig James
- Population growth highlights challenges for infrastructure planning
The latest CommSec State of the States report showed Tasmania maintained the fourth-strongest economic performance in the country and was closing the gap on the ACT.
The quarterly report investigates Australian jurisdictions’ economic performance by analysing eight key indicators — economic growth, retail spending, equipment investment, unemployment, construction work done, population growth, housing finance and dwelling commencements.
Economic performance is assessed by comparing a state’s most recent results with its “normal experience” or average over the past decade.
Tasmania’s annual population growth, for example, sits at 1.02 per cent, which would place it fifth on the ranking, however that figure is almost 78 per cent above the state’s decade average, making it the strongest state on relative population growth, and also the fastest rate for Tasmania in eight and a half years.
CommSec chief economist Craig James said Tasmania would continue to move its way up the leaderboard.
“I think Tasmania is finally finding its mojo,” he said.
“By mojo I mean you’ve got a tremendous product in terms of tourism, and I think the rest of the world is starting to embrace that.
“Certainly, more tourists are coming from other parts of Australia to Tasmania, and once they’re there a number of them are saying ‘this is a good spot to live’.”
The state also ranked first on relative position of equipment investment, which was up by more than 40 per cent on the decade average with an annual increase of 58 per cent.
Mr James said the increased number of home loans was being reflected in the growth of house prices, which Hobart is currently leading the nation in.
‘We’re not doing badly on anything’
Tasmania outperformed all other states and territories on annual growth rates, topping four out of eight indicators — economic growth, business investment, housing finance and dwelling commencements.
Independent economist Saul Eslake said it was a good result for Tasmania.
“We’re not doing badly on anything, so that puts Tasmania in the top half of Australia’s states and territories, which is consistent with where we’ve been over the last three or four months and a lot better than where we were a few years ago,” he said.
So what does this actually mean for day-to-day life?
Mr James said there would be both positive and negative effects.
“If you’ve got a buoyant economy, that does create more jobs, businesses feel a bit more comfortable, as a result people who have got jobs will feel more secure in their jobs and more likely to spend,” he said.
“[But] if population is rising, it can lead to more congestion, so that provides some challenges for the planners to make sure that the infrastructure is up to scratch.
“Population can be power, but it can also be a problem if it’s not managed well by the [State] Government and local government authorities.”
Mr Eslake agreed and said the report confirmed what a lot of Tasmanians already knew.
“[The report] captures some aspects of the improvement in Tasmania’s economic performance that will be apparent to people as they go about their daily business,” he said.
“The fact that, for example, unemployment rate is a lot lower than it’s been … that the road is more crowded, particularly in the southern part of the state, is a reflection of the fact that population growth is faster in Tasmania than it has been for the best part of the decade.”